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Market Analysis

Home » Technical Analysis » Daily » GBPUSD Nosedives, Eyes 1.3500?

GBPUSD Nosedives, Eyes 1.3500?

Posted by FXTimes in Daily - February 24th, 2016 1:28 pm GMT

British Pound Sterling GBPUSD

Key Points

  • British Pound continued to trade down, and it looks like there are more losses on the cards.
  • The monthly chart of the GBPUSD suggests that a move towards the 1.3500 level is also possible.
  • UK and all drama to exit from the Euro Zone is causing a stir in the GBPUSD pair.
  • UK CBI Distributive Trades Survey released by the Confederation of British Industry (Realized) came in at 10, down from the last reading of 16.

Technical Analysis

There was a nasty slide in the British Pound not only against the US dollar, but also against most major currencies. The GBPUSD pair traded below the 1.40 level, and created a new low. Sellers managed to take the pair towards levels not seen in the past 5 years.

GBPUSD

The trend is clear on the monthly chart, as a support trend line was breached. It looks like the pair is heading towards the last swing low of 1.3500 or even towards the 1.618 extension of the last move from the 1.4814 low to 1.7180.

On the upside, an immediate resistance may now be around 1.4000.

UK CBI Distributive Trades Survey (Realized)

Today in the UK, other than the drama surrounding the exit from the Euro Zone, the CBI Distributive Trades Survey, which is an indicator of short-term trends in the UK retail and wholesale distribution sector was released by the Confederation of British Industry. The forecast was slated for a decline from the last reading of 16 to 12 in Feb 2016. However, the outcome was disappointing, as the CBI Distributive Trades Survey decreased to 10.

The report highlighted that the “survey of 124 firms consisting of 68 retailers showed that retail sales growth slowed slightly in the year to February, in line with expectations and was a little below average for the time of year. Meanwhile, orders placed on suppliers were unchanged, better than expectations“.

Overall, there is nothing to favor the British pound buyers, which means more losses are likely in the GBPUSD pair.

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